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Politics & Policy

SF blocks contracts to homeless nonprofit referred for FBI probe

San Francisco set up a temporary homeless shelter with more than 100 trailers and RVs early in the pandemic at Pier 94 in the Bayview. United Council of Human Services, an organization that received millions to manage the site, will no longer receive public funds for this work, according to city officials. | Paul Kuroda for The Standard

An organization that received millions of dollars to house and shelter homeless people in San Francisco will be blocked from future city contracts after The Standard reported that it was legally barred from receiving public funds.

In an email Wednesday, the Department of Homelessness and Supportive Housing (HSH) confirmed that the United Council of Human Services (UCHS)—which received nearly $28 million from the city—will be barred from receiving six contracts totaling almost $10 million for future work to shelter and house people in the Bayview.

An aerial view shows Pier 94, which houses homeless people in roughly 100 trailers and RVs in the Bayview. United Council of Human Services will no longer receive public funds to manage the site, according to city officials. | Paul Kuroda for The Standard

A scathing audit published late last year identified numerous issues at United Council of Human Services, accusing the organization of flouting city rules regarding who received housing as well as financial mismanagement. Along with the audit, City Controller Ben Rosenfield and City Attorney David Chiu sent a letter to the FBI and the District Attorney’s Office requesting criminal investigations into the organization.

A day after the audit was released, Gwendolyn Westbrook, the chief executive of United Council of Human Services, told The Standard that she was giving coveted shelter space to roughly 20 family members, friends and employees. Subsequent reporting found that the state Attorney General’s Office suspended the organization’s charity status last summer. 

In total, nearly 140 city-funded nonprofits were found to have been revoked, suspended or tagged as delinquent by the AG’s Office, making them ineligible to receive public funds.

In response to that report, the city controller, city attorney and city administrator ordered departments to make sure nonprofits receiving city grants were in compliance with all local, state and federal rules before dispersing funds for future contracts.

“Given the new city guidelines around no longer contracting or subcontracting with nonprofit organizations who are not in good standing with the AG’s charitable registry, HSH is amending its current agreements with Felton to remove UCHS as a subcontractor,” said Emily Cohen, a department spokesperson.

United Council of Human Services in San Francisco is pictured on Monday, April 10, 2023. | Paul Kuroda for The Standard

Nearly $10 million in contracts initially intended for United Council of Human Services will instead be directed to Felton Institute, a nonprofit that specializes in mental health and social services. 

Westbrook did not respond to requests for comment. Shawn Richard, a deputy director at the organization, said he and Westbrook were unaware of the city pulling future contracts during a brief phone interview Wednesday.

“This is all news to us,” Richard said.

Felton Institute, which the city brought in last year to act as a fiscal sponsor to help facilitate United Council of Human Services’ contracts, will now operate supportive housing for formerly homeless veterans and other adults at Hope House, a Bayview drop-in center, a safe sleeping site on Jennings Street and a recreational vehicle shelter at Pier 94. Officials for Felton did not respond to requests for comment.

United Council of Human Services has a long history in the Bayview, doing work in predominantly Black neighborhoods on the southeast side of the city dating back decades. The organization, originally known as Mother Brown's Kitchen, has provided meals and shelter to tens of thousands of people over the years.

However, city auditors have raised serious concerns about the organization’s financial operations under Westbrook going back to 2017. An audit that year made 28 recommendations that touched on internal policies, oversight of financial operations and issues around payroll and contracting. Last year’s audit echoed similar concerns, and The Standard’s review of IRS filings with professional tax attorneys found “huge red flags.”

Both the FBI and DA’s Office declined to comment on potential criminal investigations into the United Council of Human Services.

Gwendolyn Westbrook, the CEO of United Council of Human Services, is pictured at a homeless drop-in center and soup kitchen on Jennings Street in San Francisco on March 15, 2011. | Carlos Avila Gonzalez/The San Francisco Chronicle via Getty Images

The first sign that the organization was at risk of losing its Department of Homelessness and Supportive Housing contracts appeared in a Port Commission memo on operations of the RV shelter site at Pier 94. 

“HSH is following our policy guidance by divesting with a contractor that’s not in good standing with the California Attorney General, which is ultimately a positive step,” the City Controller’s Office said in a statement Wednesday.

It’s unclear if the Pier 94 shelter will continue operations for the foreseeable future, as it was designed to provide safer living conditions early in the pandemic. 

A city performance report found that trailer fires and pet feces have been an issue at Pier 94, and a civil complaint filed by a former staffer in February accused Westbrook of turning a blind eye to drug use and dealing and prostitution in RVs under the control of one of her relatives.

The lawsuit also accused Westbrook of “living a lifestyle inconsistent with her reported salary,” adding that she often bragged to United Council of Human Services workers about buying cars for her family members and drove around with “a trunk full of high-priced jewelry” that was obtained from one of the organization’s board directors.